Sell one model a year? Apple is more diversified now than it has been in decades. Speaking about margins, Apple's margins are already fat, if they drop a few more points to pick up market share, no great losses there. --- that is a nice problem to have.

Pretty much as expected. Apple's Q3 is always down in anticipation of new products just in time for the Christmas shopping season. I'm certainly waiting to see what the 5S/6 will be like so I can get the crappoop off of Sprint's barely-operative 3G network.

Just like the PC desktop market, the advancement in build and functionality on the iPhone has stagnated. The 4/4S are "good enough" and there's no real disadvantage in buying a lower-end device. This means that Apple will have to do the same as the PC desktops and build bespoke low-end devices whose limitations and lower price become their own selling point (netbooks, HTPCs, All-in-One)

Someone had a really bad day with percentages, it seems (for both graphs, all the percentages are wrong)

Results beat expectations though, they bumped revenue just a little when it was expected to be flat but the expectation was a much bigger drop in profits. Considering the lack of "exciting" Apple products, I don't think anyone expected much at all this time around.

The "Model-T" sales model potentially has greater margins, but as with Ford, Apple will be undercut as people decide they really want a more unique and custom phone, rather than the single model offered to them by the benevolent dictator.

Lack of a slider, no ability to install eg. a 3rd party WiFi tethering app your ISP doesn't want you to have (without rooting your phone), etc., has sure kept me from even considering an iPhone. Virgin Mobile's $5/month discount on their already low-cost service is very interesting through. I'll still stay with Android, no question, but perhaps some family members would prefer an iPhone, and I'd prefer my $5/mo back.

And the last time that Apple was this "diversified", they ended up almost closing shop. It is still a very small company in relative terms.

I'm sure you'll be down voted to oblivion since the comment seems to make no sense at all (Apple has more revenue than Microsoft or IBM, more profit than Google, more employees than Disney -- and fewer products than any of those) but I'm morbidly curious: were you just that wrong or did you mean something else and it got mangled in communication?

Just like the PC desktop market, the advancement in build and functionality on the iPhone has stagnated. The 4/4S are "good enough" and there's no real disadvantage in buying a lower-end device. This means that Apple will have to do the same as the PC desktops and build bespoke low-end devices whose limitations and lower price become their own selling point (netbooks, HTPCs, All-in-One)

My personal experience going from the 4 to the 5 was dramatically different than your “stagnated/good enough” story. Using it for twitter, I can click on a news link, scan/read it and pop back into twitter without worrying about the lag, while previously I only dared go for ones that looked most valuable.

Admittedly, LTE makes for a big part of the change. But seeming 3X as fast makes a quantitative difference in what I do. Places with 3G service will have modest effective gains. India, with mostly 2G networks, won't be transformed by faster CPU nearly as much.

But 4G speeds will inevitably bring new modes of usage, and new apps, into being, that weren't time-efficient earlier, just as the sluggardly original iPhone was a dramatic game-changer despite being so much slower than desktop apps. It's just something you have to count on in tech that is so new, and I don't see why it'll need to wait until we all have Glass-type gizmos. Maybe, even the PC desktop/laptop systems will be transformed when they predictably have cameras, better location awareness, more ubiquitous mobile networking, etc. That's not where the Windows ecosystem is going today, but Apple has been trying to extend its breadth versus cutting costs for good-enough cubicle heaters.

The "Model-T" sales model potentially has greater margins, but as with Ford, Apple will be undercut as people decide they really want a more unique and custom phone, rather than the single model offered to them by the benevolent dictator.

Lack of a slider, no ability to install eg. a 3rd party WiFi tethering app your ISP doesn't want you to have (without rooting your phone), etc., has sure kept me from even considering an iPhone. Virgin Mobile's $5/month discount on their already low-cost service is very interesting through. I'll still stay with Android, no question, but perhaps some family members would prefer an iPhone, and I'd prefer my $5/mo back.

Meanwhile Samsung reportedly made more than Apple last quarter $1.43B more to be exact

Meanwhile, you compared Samsung's operating profit to Apple's net income. Samsung last quarter had operating profit of $7.9B USD, but it's net income was $6.4B.

That's based on Samsung's advisory anyway (actual financial report is out in a few days). Not that it matters anyway, so Samsung makes more/less money than Apple. What does that matter? Android sells more phones, Samsung is a hugely diversified company and Apple has carved an incredible niche for itself, those things were true yesterday and they're true today.

Just like the PC desktop market, the advancement in build and functionality on the iPhone has stagnated. The 4/4S are "good enough" and there's no real disadvantage in buying a lower-end device. This means that Apple will have to do the same as the PC desktops and build bespoke low-end devices whose limitations and lower price become their own selling point (netbooks, HTPCs, All-in-One)

Smartphones and tablets are not even close to "good enough". They are tolerable because there isn't anything better yet. A few years ago the iPhone 3G and Droid were considered "good enough", now they're dog slow.

This is just standard maturity problems for any company that has seen the kind of growth Apple has over the last decade. And they're not alone. Google is struggling trying to find the next big thing. Social media is kind of over. Samsung's having saturation problems with its smart phones as well. This is what a plateau looks like.

Maybe they'll invent the warp drive soon, but I think tech-watchers had better get used to less shock-and-awe from consumer electronics.

During the analyst question and answer session, more than one analyst attempted to draw information from Cook and Oppenheimer about a lower-cost iPhone (as well as other teased "new product categories"), but neither would share any new information.

Why do they bother? Do they seriously think, "I know Apple NEVER reveals info about upcoming unannounced products in situations like this, but maybe they'll slip up this time!" It's just like that All Things D interview - why waste everyone's valuable time asking questions that aren't going to be answered, and let that time be used for productive discussions instead.

Just like the PC desktop market, the advancement in build and functionality on the iPhone has stagnated. The 4/4S are "good enough" and there's no real disadvantage in buying a lower-end device. This means that Apple will have to do the same as the PC desktops and build bespoke low-end devices whose limitations and lower price become their own selling point (netbooks, HTPCs, All-in-One)

Smartphones and tablets are not even close to "good enough". They are tolerable because there isn't anything better yet. A few years ago the iPhone 3G and Droid were considered "good enough", now they're dog slow.

People were saying that ten years ago (that desktop machines were not good enough). They were correct --- but only just. WIth Penryn, desktop machines became good enough, for a large enough fraction of users, that the game changed completely and, pretty much on a dime, the PC industry went from one where users upgraded every two or three years to one where users upgrade when the machine dies and no sooner.

The same is true for phones. The iPhone4 and 4S were not good enough --- but only just. For a large enough fraction of users to be commercially significant, the iPhone 5 IS good enough. The last real bottlenecks on the 4 and (less so the 4S) were a lack of zippiness in a few areas (like app launch), and cellular performance. The zippiness is solved (to a good enough level) with the A6, and cellular performance is at the mercy of the telcos. LTE is as good as it's going to get for the foreseeable future. This is not just me making random claims --- the future of the telco industry is laid out in public documents available at, eg, the 4GPPAmericas web site. The realistic future improvements are pretty much all on the side of the telcos. they involve things like SON (the self optimizing network, software which tracks performance across the network and reallocates frequencies etc to improve performance), base station co-operation to avoid interference and increase signal strength at boundaries, an increased density of micro and femto stations, etc. There are a few minor things that can be done in the mobile to improve performance, for example more antennas to allow for more diversity, or better algorithms for which of multiple antennas to use for a given purpose. But we're talking 5, 10% a year improvements. The one big thing on the horizon is channel bonding --- but it's not clear how that will make much of a difference until the political issues surrounding either releasing more spectrum or re-using old GSM spectrum get resolved.

So what do you imagine as these great new features which will make the iPhone 6 a MUST have device, worth paying $650 for, even though one owns an iPhone5? 802.11ac is nice, but I don't see it as in this category. Health monitoring is nice, but that seems likely to be delivered via iWatch not iPhone. Fingerprint recognition (and/or augmented by facial recognition) is very nice, and will be the killer feature for a small (note small) group of people. Most will appreciate the point but figure "heck, let's wait till my phone is stolen, then I'll get the secure one".

Claiming that desktops were not yet "close to good enough", that there'd always be people willing to pay high prices for higher performance, was the thinking that got Intel into the trouble it is in today (and, to a lesser extent, Microsoft). Simply claiming that it's true for phones (and tablets) is not good enough. I want REALISTIC examples of the sort of improvements that are - FEASIBLE- cheap enough to be added to a phone at phone prices AND- significant enough that people will pay for them, even when their existing phone still works.

I think there is more scope for improvement people will pay for in tablets. And there is a dark horse in the form of different form factors (13" iPad? 5" iPhone?) which might be compelling for some users. But these are one-more-generation improvements, they don't change the long-term story (and long-term here is 5 years).

The US market is strange because of the importance of how the telcos charge, and the way the subsidy means upgrades every two years are substantially cheaper to the consumer than their "real" price. But (a) the US market is not the rest of the world and(b) even in the US market it's not clear how much longer this is going to continue. The suite of crazy plans coming out of VZW and ATT suggest a kind of desperation on their part, an attempt to grab as much money from users as possible over the next two or three years, before consumers cotton onto just how stupid these plans are.

This is just standard maturity problems for any company that has seen the kind of growth Apple has over the last decade. And they're not alone. Google is struggling trying to find the next big thing. Social media is kind of over. Samsung's having saturation problems with its smart phones as well. This is what a plateau looks like.

Maybe they'll invent the warp drive soon, but I think tech-watchers had better get used to less shock-and-awe from consumer electronics.

I'd put it differently. I wouldn't claim we are close to "peak compute". There are still many things we could imagine our phones doing which would make lives better. For example: better translation, image recognition, recording everything we say through the day and whom we meet and summarizing it, health tracking, ...

Some people will go berserk about some of these (eg recording everything we do through the day) --- same old same old, I'm not interested in arguments which land up as "well, I could see how it would be helpful, also how it could be misused". BUT the point is most of these don't require substantially new hardware. They don't provide an obvious track for essential HW improvements going forward for the next ten years. Rather they are powered by data centers, machine learning, and big statistics. Google will do just fine in experimenting with these (though they will probably make many mistakes in implementing them for mass consumption).

Apple I am lot more worried about because (so far at least) they have not exhibited any evidence of treating machine learning as the next pillar of computing. I fear that they are too rooted in Steve Jobs' world, the world that says it's important to have good HW, a good OS, good apps, good UI, good design, but a world that did not know about big statistics in the 70s, the 80s, the 90s --- and that treats machine learning as a weird and minor side issue, the way MS thinks about design. I see computing of the future (say 10 yrs from now) as PERMEATED with machine learning, and with the Apple of today as poorly setup to lead this transition and to be part of it.

Samsung last quarter had operating profit of $7.9B USD, but it's net income was $6.4B.

Hang on... They made more profit than income? How can that be? Is income different to revenue?

Well said. I'll just add that some companies dishonestly promote an earnings value from which they have deducted some of their expenses, usually taxes, debt services, depreciation, etc. They call this 'operating income', 'EBITDA', 'non-GAAP' income etc. depending on the exact omissions being used. It's just a distractor, ignore it. The expenses being factor out usually aren't going away, and what you as an investor made is the bottom line profit. Often companies go down this road when their profits aren't growing- the fact that Apple has remained very clear about what their profits are even though they have declined is a good thing and shows a confident management team.

Meanwhile Samsung reportedly made more than Apple last quarter $1.43B more to be exact

Meanwhile, you compared Samsung's operating profit to Apple's net income. Samsung last quarter had operating profit of $7.9B USD, but it's net income was $6.4B.

That's based on Samsung's advisory anyway (actual financial report is out in a few days). Not that it matters anyway, so Samsung makes more/less money than Apple. What does that matter? Android sells more phones, Samsung is a hugely diversified company and Apple has carved an incredible niche for itself, those things were true yesterday and they're true today.

Apple made all of it's money from consumer electronics. Samsung also sells kitchen and bathroom appliances so its not an exact comparison for judging success.

Apple I am lot more worried about because (so far at least) they have not exhibited any evidence of treating machine learning as the next pillar of computing. I fear that they are too rooted in Steve Jobs' world, the world that says it's important to have good HW, a good OS, good apps, good UI, good design, but a world that did not know about big statistics in the 70s, the 80s, the 90s --- and that treats machine learning as a weird and minor side issue, the way MS thinks about design. I see computing of the future (say 10 yrs from now) as PERMEATED with machine learning, and with the Apple of today as poorly setup to lead this transition and to be part of it.

If you think Apple is still on the Steve Jobs path, but don't think they are interested in machine learning, I think you might want to take a trip back to 1987..

I'd buy a plastic backed iPhone 5S in a heartbeat if the rumors are actually reality. Hell, I'd buy two. I think the glass and aluminum iPhones are great products that are well engineered and of high quality, but I'd much rather have a plastic backed 5S. They don't use cheap plastic, and I really don't like having easily seen scratched materials on a phone. The all glass backs of the 4 and 4S were a mistake in material design I think. They look fantastic, but they're weak. A plastic backed phone would be so much better to me. I'm tired of buying overpriced cases to protect a good looking but incredibly fragile device. This should be the norm and not the "cheap" option. A plastic phone done right is as good an as "premium" a device as a fragile glass and scratch prone aluminum one. Apple doesn't use cheaply made materials, a plastic backed iPhone is long overdue, and if they stuff the 5S guts in it I'll buy two the day they go on sale.

And the last time that Apple was this "diversified", they ended up almost closing shop. It is still a very small company in relative terms.

I'm sure you'll be down voted to oblivion since the comment seems to make no sense at all (Apple has more revenue than Microsoft or IBM, more profit than Google, more employees than Disney -- and fewer products than any of those) but I'm morbidly curious: were you just that wrong or did you mean something else and it got mangled in communication?

I would bet he was just confusing the Apple of the past, which was "almost" (well, not really, but close enough) going to fail, which was a relatively small company (relative to Microsof, Dell, etc.) at the time, and the Apple of today, which is huge.This, or he was just self-consciously trolling.